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The gold standard without fear or reproach

05 October 2020

Ershov Mikhail V. Principal Director on Financial Studies, Head of the Financial Analysis Department

Mikhail Ershov, Principal Director on Financial Studies commented to Expert-online on currency problems.

Mikhail Ershov, Doctor of Economics

The author points to a number of patterns that I have repeatedly pointed out in my articles, namely, the ratio of gold and foreign exchange reserves to the monetary base for the ruble is indeed one of the highest in the world. This, in fact, gives a great deal of scope for the regulator to influence both the rate level and volatility (another thing is that it does not do this).

The author also proposes the use of a two-tiered exchange rate (internal and external), in principle, this was done in our country back in the USSR when organizing the first foreign exchange auctions, which laid the foundation for the future foreign exchange market (1989-91). Apparently, the gold ruble can mean its stability and non-volatility, which is probably bad for speculators and partly not very desirable for exporters and the budget who are interested in the ruble depreciation.

It should be borne in mind that the price of gold, although it is volatile, nevertheless is regulated by some international centers of power, and linking the national economy to these mechanisms may involve manageable risks.

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